Asian Airlines Ready To Fly With The Best

April 02, 1986|By Carol Jouzaitis.

Singapore Airlines` recent $3.3 billion jet order set a record for commercial aircraft purchases and pointed up the fact that the growth of Asian carriers in recent years has been nothing short of astounding.

Not too long ago, airlines in the Far East were sleepy, government-subsidiz ed operations, hampered by a highly regulated environment and concentrating on domestic service.

In the last decade, however, they have modernized their fleets and expanded their route systems around the world.

Japan Air Lines carries more passenger traffic on international routes than any other airline, having overtaken Pan American World Airways for the top spot three years ago.

In recent years, fast-growing Singapore and Korean Air Lines moved into the Top 10 list of carriers in international ridership.

Just as importantly, airlines in the Far East have emerged as world-class competitors, sophisticated in marketing and renowned for pampering their passengers in-flight. As a group, they represent a whole new source of competition in this country.

``I see no reason why Pacific airlines shouldn`t be compared with major U.S. airlines,`` said Julius Maldutis, analyst with Salomon Brothers Inc. in New York.

In particular, Asian carriers have been aggressively expanding their share of the U.S. market, flying nonstop to more cities here.

In arguing for government approval of its recent purchase of Pan Am`s Pacific routes, United Airlines noted that foreign carriers have captured the majority of U.S.-Pacific traffic. Overseas carriers claim around 56 percent, up from 33 percent in 1960.

Just 14 years ago, Singapore ranked a lowly 54th among international carriers. An ambitious expansion brought a 4,000 percent leap in ridership by 1983, catapulting Singapore to 7th place in international traffic.

The airline plans to expand its reach further. Last week, Singapore ordered up to 20 long-range widebodies from Boeing Commercial Airplane Co. When the Boeing 747s are delivered, Singapore will boast one of the world`s biggest widebody fleets, able to fly nonstop between the Orient and Europe.

Spurred by economic growth, the Pacific Rim is the fastest growing world aviation markets. In the next decade, air traffic across the Pacific is expected to expand at double the rate of trans-Atlantic ridership.

While most Asian airlines remain at least partly nationalized, there is a trend toward selling government ownership to the private sector.

Korean Air, for example, was sold in 1969 to Korea`s Hanjin Group. Then a domestic carrier with eight small aircraft, the family-run airline has since expanded its reach from Seoul to 30 cities on five continents.

After its image was tarnished by the downing of Flight 007 by a Soviet jetfighter, KAL beefed up pilot training procedures and launched a massive public relations campaign to restore public confidence.

Hoping to cash in on the 1988 Olympics, which will be held in Seoul, KAL is quickly moving to add more foreign destinations, with a keen eye on Chicago.

``We`re making an all-out effort to open new routes,`` said Choong Hoon Cho, KAL`s chairman and chief executive.

Japan, meanwhile, is preparing to sell its 35 percent interest in JAL, perhaps as soon as early next year.

The change is just one of several facing JAL, still shaken by the crash last August of a jumbo jet en route from Tokyo to Osaka in which 520 people were killed.

The Japanese government is liberalizing its aviation industry, implementing a decision that, for the first time, will end JAL`s 32-year monopoly in the international arena.

``Internationally, we expect a great impact,`` said Mitsunari Kawano, a JAL managing director and vice president. ``We`ll have more competition over the Pacific, as well as to Europe and mainland China.``

But JAL`s expansion program remains undampened: The carrier plans to purchase $2.4 billion in new equipment by 1988. In July, JAL will add another U.S. gateway, initiating nonstop flights between Atlanta and Tokyo.

Simultaneously, JAL is boosting service to Chicago and Seattle and major European cities, with plans to increase its New York schedule later this year. In response to intensified competition from the much-larger United Airlines, JAL has cemented partnerships with Delta Air Lines and Western Airlines. By coordinating its schedule with the U.S. carriers, JAL hopes to pull more passengers onto its system.

JAL`s traffic within Japan is down 25 percent from a year ago because of strong reaction to the fatal crash. But the carrier plans to make use of more liberal laws to add more domestic routes.

In a first stab at the overseas market, All Nippon Airlines--Japan`s largest domestic carrier with a fleet of 95 aircraft--begins flying to Los Angeles and Washington in July.